–Japan Producer Prices +0.8% M/M, Led by Electric Power, Chemicals
–Japan Producer Prices Rebound 7.3% in Fiscal 2021 After 1.4% Drop
By Max Sato
(MaceNews) – Producer inflation moderated slightly in March but remained high above 9%, close to a 41-year high, as global supply bottlenecks and high energy costs continued amid uncertainty over the war in Ukraine, data released Tuesday by the Bank of Japan showed.
In contrast to elevated producer costs, consumer inflation has been rising gradually toward 1%. BOJ policymakers believe inflation is unlikely to be anchored around the bank’s 2% target any time soon due to slow wage growth and weak service prices, even though the year-on-year rise in consumer prices may temporarily hit the target level this year.
The key points of domestic CGPI:
* The corporate goods price index (CGPI) rose 9.5% on the year in March, coming in higher than the median economist forecast of a 9.3% rise. It was the 13th consecutive gain after surging 9.7% (revised up sharply from a preliminary 9.3%) in February, which was the highest since December 1980, when the index jumped 10.4% for the 14th straight month of double-digit percentage gains in the wake of the 1979 oil crisis triggered by the Iranian Revolution.
* The depreciation of the yen has also added fuel to high import costs at producer levels, which also marked the 13th straight year-on-year rise in March. The increase in yen terms was larger at 33.4%, compared to 26.1% in contract currencies.
* The year-on-year surge in some commodities that had surged earlier has moderated slightly in recent months. Prices for petroleum and coal products continued to show a slower rise of 27.5% in March after a revised 34.3% gain in February. Non-ferrous metal prices rose 23.5%, also slowing further from a revised 25.0% increase. Prices for lumber and wood products rose 58.9% after a revised 59.7% rise.
* The items that posted faster year-on-year increases in March compared to February include: beverages and food (3.8% vs. 3.5%), pulp, paper and related products (1.8% vs. 0.8%), iron and steel (27.9% vs. 27.7%), general purpose machinery (2.7% vs. 2.5%), production machinery (1.5% vs. 1.3%) and information and communications equipment (1.9% vs. 1.5%). Previous figures were revised.
* On the month, the domestic CGPI rose 0.8% in March after gaining 0.9% (revised up from a 0.8% rise) in February. The increase was due to higher prices for electric power, chemicals, non-ferrous metals and scrap and waste, largely as seen in recent months.
* In fiscal 2021 that ended in March, the CGPI rebounded 7.3% on the year after falling 1.4% in fiscal 2020 and edging up 0.1% in fiscal 2019.